Outsell says click fraud accounts for 14 percent of per-per-click ads — others say more — costing marketers $800 million a year. The FT story is here; the CNET story is here.

One thing Google could do to at least stem the tide would be to wipe out spam blogs. It’s cynical of them to say they’re concerned about click fraud when splog fraud is operating right in their own backyard.

And I’ll say that this is one more reason why we need to get our act together in the networked/distributed/citizens media world and create higher value ad networks built on trust. See my Ad Age call for an open-source ad network here.

Since prices for Google ads are set by the advertisers themselves via the bidding system, click fraud would be factored in to the price that advertisers are willing to pay, to the extent that advertisers think that click fraud occurs.

It is in Google’s interest to minimize click fraud — or the perception of click fraud — because it detracts from the value of their ad product.

Here’s what they should do, and what we are doing at MyMindshare.com.

They should come out at say that click fraud happens. They should say it could be as high as 20%. Buyer beware, and bid accordingly.

That being said, we will do everything we can to minimize click fraud, and we will be up front with our best information about the extent that it occurs, so advertisers can make their own best judgement.

If Google takes a position that it could be as high as 20%, an estimate at 14% would be very good news.

http://mymindshare.com Jim Bursch

My point is that Google’s estimate should always be HIGHER than what is perceived in the marketplace. Then they can’t be accused of misleading advertisers.

http://mymindshare.com Jim Bursch

While I am on a roll, this is all simply more evidence of the inate corruption of the advertising-supported media business model.

The best interests of consumers are not aligned with the best interests of media, which is not aligned with the best interests of advertisers.